In November, the Moscow apartment market collapsed by 65%

According to analysts at the PRO EXCHANGE real estate agency, in November 2022, only 10,224 square meters of apartments in the primary market were sold in the capital. The result is 65.92% lower than in the same month of 2021, when a total of 30,006 “squares” of new apartments were sold. Compared to September and October 2022, sales in the segment fell by 46.23% and 21.42%, respectively.

According to PRO EXCHANGE experts, in just 11 months of 2022, 202,754 square meters of apartments under construction were sold on the capital’s market, which is 34.48% lower than in the same period in 2021, when 311,165 “squares” were sold in total.

In addition to November, a significant drop in demand in the segment was observed in May and April of this year. In May, the volume of apartments sold decreased by 61.75% by May 2021 – from 33,127 to 12,670 sq. m. In April, demand fell by 57.99% – from 41,960 to 17,625 sq. m.

“By analogy with the residential real estate market, we saw two waves of falling apartment market this year. The first took place in April-May, when demand, the number of requests and transactions collapsed facing socio-political uncertainty and a sharp increase in the key rate, which made the purchase of apartments on a mortgage practically inaccessible. By mid-summer, the segment began to recover, this trend lasted until the announcement of partial mobilization, afterwards the market went flaps down”, Ekaterina Nikitina, head of the PRO EXCHANGE real estate agency, vice president of the Guild of Realtors of Moscow, said.

At the same time, while the extended preferential mortgage program helped the restoration of the residential real estate market, it had a negative effect on the apartment segment.

“Preferential programs of state support do not apply to apartments, since de jure they are not residential premises. Accordingly, they did not play a plus. On the contrary, many buyers, considering the purchase of apartments or of a little more expensive flats in the same location, chose housing, since it could be purchased on a mortgage at preferential rates”, she added.

Despite the decrease in demand, new apartment projects continued to appear. As a result, from February to November 2022, the supply volume in the segment increased by 27% from 336 to 426 thousand square meters.

Prices for apartments in the primary market of Moscow, despite the fall in demand, have increased since the beginning of the year. The weighted average offer price increased by 12.7% – from 409 to 460.9 thousand rubles per “square.” The average price in the context of concluded transactions in 2022 increased too – by 10.89%, from 358 to 397 thousand rubles per sq. m.

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